Charpentier, Arthur; Le Maux, Benoît - In: Journal of Public Economics 115 (2014) C, pp. 1-17
This paper develops a theoretical framework for analyzing the decision to provide or buy insurance against the risk of … natural catastrophes. In contrast to conventional models of insurance, the insurer has a non-zero probability of insolvency …. Our model shows that government-provided insurance will be more attractive in terms of expected utility, as it allows …